How Much Savings Should An Average Singaporean Have Accumulated By A Certain Age?

Put aside all the “propaganda” you see online today on investing, trading and fanciful financial products. The first step towards financial freedom should always start with savings.

If you are someone with a great level discipline to save, great! Kick off your savings routine today!

If you are someone who lacks the discipline to save, set up your own system to set aside a portion of your money before it reaches the “leaky bucket”.

How much savings should I have accumulated?

To answer this question, I probably have to blatantly visualise your life in front of you.

Instead of coming out with an absolute amount of savings, we base the savings amount on your individual yearly expense. This amount varies for each individual depending on the lifestyle which one chooses to lead.

To give a good projection of how much one needs to save, we took into account these factors:

Singaporean male to go through 2 years of National Service (NS)

The lower savings rate for an early stage in life (lower pay, higher financial commitments such as student loan, marriage and housing loan)

Higher savings rate closer to retirement

Retirement is at age 62

Life expectancy of Singaporean male is 80 and female at 85 years old

The age that one starts working

Years to save up for retirement
(retire at 62)

Years to enjoy retirement

Male Diploma Graduate
(after NS)

22

40

18

Male Fresh Graduate

26

36

18

Female Diploma Graduate

20

42

23

Female Fresh Graduate

24

38

23

The savings rate of a typical male fresh graduate

Using a male fresh graduate as an example due to him having the least time to save (36 years to save up 18 years worth of expense). From there, we work backwards to give a projection of how much you should have saved by a certain age.

To get an exact number, simple use:

(How much you need to survive per year) X (Number of years)

Age
(Male Fresh Graduate)

Savings Rate

Annual Expenses Saved

26-30

Low Salary
Clearing Loans
(Very Low)

At least 6 Months

31-35

Marriage
Housing Loan
(Low)

At least 1 Year

36-40

Kids Education
Housing Loan
(Low)

3-6 Years

41-45

Kids Education
(Low)

4-8 Years

46-50

Realised you need to SAVE for retirement!
(High)

6-10 Years

51-55

Debt free
(High)

7-12 Years

56-62

Retirement Planning
(High)

At least 18 Years

Target at age 62:

At least 18

The savings rate of a typical female fresh graduate

Taking life expectancy into account, females tend to live longer than their male counterparts.

With this, female face a steeper saving slope due to the need to save an additional 5 more years worth of expense.

Age
(Female Fresh Graduate)

Savings Rate

Annual Expenses Saved

22-25

Low Salary
Student Loans
(Very Low)

At least 6 Months

26-30

Low Salary
Student Loans
(Very Low)

At least 2 Years

31-35

Marriage
Housing Loan
(Low)

At least 6 Years

36-40

Kids Education
Housing Loan
(Low)

8-11 Years

41-45

Kids Education
(Low)

9-13 Years

46-50

Realised you need to SAVE for retirement!
(High)

11-15 Years

51-55

Debt free
(High)

12-17 Years

56-62

Retirement Planning
(High)

At least 23 Years

Target at age 62:

At least 23

Further reading: Are You Saving More Than An Average Singaporean?

Do take note if you fall within the below demographic:

Monthly income of S$4,056 (inclusive of employer CPF contributions) and above

25 years old and above

97% of middle to high-income earners above the age of 25 years old are saving between 30% to up to 49% of their salary. How much of your salary are you saving?

Seedly’s Tips: How to determine my best savings rate?

Assuming your determination to save up brought you down so “far” this article, here’s a simple exercise to determine your saving rates.

Taking into account that different individual has different

salary

financial commitments (housing loans, student loans)

A good exercise to determine your best saving rate is

Start off by saving 10-15% of your salary.

Challenge yourself and increase that savings percentage by 1% every month

Keep doing so till it hurts if you were to increase it by another percentage.

That will be your best savings rate

A simple rule of thumb will be: As your income increases, your savings rate should increase too. This is possible if one’s total expense increases at a slower rate than his income increment.

Personal Finance Tools to help you get there:

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